“I don’t think these appeals have a high likelihood of success,” Palmisano said. “But we think it’s worth going through the process to see if there’s some agreement we can make with the agency to go forward.”

In an interview earlier this summer with MBJ, Palmisano said Augment and the company’s growing ankle and extremity business were key elements behind Wright Medical’s sale of its OrthoRecon knee and hip business to MicroPort, a Chinese company. That sale netted the company $290 million and spurred Wright’s move from Arlington to East Memphis. Wright received a 15-year retention PILOT to move its headquarters to 1023 Cherry Road in a $10.6 million investment.

The FDA’s decision to not clear Augment is a major setback for Wright, and Palmisano seems to already be anticipating a second rejection from the FDA. He said he “doesn’t have the appetite” for another trial.

Augment has regulatory approval in Canada, Australia and New Zealand. Instead of investing millions of dollars in restarting the FDA process, Wright would focus on those markets instead.

In an earlier interview with MBJ, Michael Tu, an investment analyst at New York-based BlueHill Group, said there was no guarantee ankle and extremities would continue its growth at the time. He also said the company was gambling with Augment (4).

“They’re losing $270 million worth of sales without hips and knees,” Tu said. “Where will that come from, Augment? Not in year one or year two. There’s going to be a period where investors will have a tough time evaluating the company.”

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